Unilever is cutting 7,500 jobs and spinning off its ice cream business

London: Unilever, the company that makes Ben & Jerry’s ice cream, Dove soaps, and Vaseline, said Tuesday that it is cutting 7,500 jobs and spinning off its ice cream business to reduce costs and boost profits.

London-based Unilever said its ice cream business, which also includes Magnum bars, has “distinct characteristics” from its other brands and would benefit from separate ownership to increase growth. It said the split is expected to be completed by the end of next year.

The British consumer goods company with 128,000 employees also said it is launching a “productivity programme” that is expected to lead to a reduction of about 7,500 mostly office-based jobs worldwide.

Unilever said it will invest in technology to find efficiencies and avoid duplication which it anticipates will help it save 800 million euros ($867 million) over the next three years. The company also laid off 1,500 staffers in early 2022.

“Simplifying our portfolio and driving greater productivity will allow us to further unlock the potential of this business, supporting our ambition to position Unilever as a world-leading consumer goods company delivering strong, sustainable growth and enhanced profitability,” said CEO Hein Schumacher, who took over the helm at Unilever last summer.

The company’s shares jumped 3.6% in morning trading on the London Stock Exchange.

“The share price bounce goes some way in reversing what has been a difficult last year, as investors have fretted over a company with limited high growth prospects and in need of streamlining despite its reputation as a solid defensive play,” said Richard Hunter, head of markets for interactive investor, an online investment service.

The company behind Hellman’s mayonnaise, Axe fragrances, and Cif household cleaners said it is targeting underlying sales growth of mid-single digits after spinning off the ice cream business.

It saw sales volume drop 3.6% in 2022 after jacking up prices 13.3% on average across its brands that year. In response, it raised prices just 2.8% last year, and sales rose 1.8%.